With interest rates rising, more aggressive traders are using short or inverse exchange traded funds to capitalize on weakening Treasuries and fixed-income assets, but the instruments do not come without risks.

Timothy Strauts, ETF analyst at Morningstar, points out that funds like the ProShares UltraShort 20+ Year Treasury (NYSEArca: TBT) offers investors the opportunity to generate an inverse leveraged daily return – if the Barclays 20+ year U.S. Treasury Index dips 5%, the fund tries to reflect a 10% gain for that day.

The iShares Barclays 20 Year Treasury Bond Fund (NYSEArca: TLT) has declined 3.8% over the past month, whereas TBT has gained 7.4%.

Source: Yahoo! Finance